Judgment summary
Reload Aquarius Shipping International (Pty) Ltd brought an urgent application against the Commissioner for the South African Revenue Service concerning the detention of consignments destined for its bonded warehouse (JHB OS36442). The applicant sought dispensation with normal service, condonation of non-compliance with section 96 of the Customs and Excise Act, and interim relief pending Part B, including an interdict against further detentions and directions regarding warehouse declarations, customs clearances and the release of consignments detained at Beitbridge (2, 2.1-2.3.3).
Strijdom J ruled that the question of urgency be determined first (3). After considering the parties' contentions, the court found that the applicant had created its own urgency and struck the application from the roll with costs, including the costs of senior and junior counsel on Scale C and Scale B respectively (1).
Background
The dispute arose from decisions taken by the Commissioner during June 2026 after concluding that the applicant's previously approved warehouse surety had become inadequate. Thirteen consignments were detained under sections 87 and 88 of the Customs and Excise Act, although some consignments were permitted to proceed (6.1).
The applicant is the licensee of a customs bonded warehouse storing high-valued goods, including tobacco, and must maintain security sufficient to cover duty and VAT on dutiable goods stored (9). The security amount lodged for the warehouse was R3 884 140.00 (12).
Information from SARS' Warehouse Inventory Management System (WIMS) showed that, for the period 14 June 2025 to 14 June 2026, the customs value of goods received and stored in the warehouse was R5 411 823 152.00, attracting customs duty of R1 261 282 380.45 and VAT of R1 576 602 975.56. This meant the security required to cover duty and VAT was R2 837 885 356.01, revealing a shortfall of R2 834 001 216.01 against the lodged security (13).
From 16 June 2026 the Commissioner issued detention notices in respect of goods declared at entry as destined for the applicant's warehouse and advised the applicant to increase its bond to cover the potential customs and tax exposure (14-15). SARS sent a request for information seeking documentation on the security increase, an explanation for accepting goods with insufficient security, correspondence on the security increase, and current warehouse inventory records reflecting stock held in bond, among other things. The applicant failed to provide the warehouse records sought.
Core dispute
The applicant contended that it had acted immediately after the first detention notices, engaged with SARS, attended meetings, responded to information requests, increased its security and repeatedly asked SARS to identify and explain the required security amount. It argued that the urgency was ongoing, that the detention decisions were taken under a wrong statutory power, and that it could not obtain substantial redress in due course because a successful review would not undo the disruption to its business, commercial relationships and financial losses (7-8).
The respondent contended that the urgency was self-created. It argued that it could not simply determine an increased security amount but required the applicant to complete an addendum disclosing the value of goods in the warehouse and to furnish copies of the warehouse bond register, which the applicant had failed to do.
Court findings
The court applied the test under Rule 6(12)(b) of the Uniform Rules of Court, requiring an applicant to set out explicitly the circumstances rendering the matter urgent and why substantial redress could not be obtained at a hearing in due course, referring to East Rock Trading 7 (Pty) Ltd v Eagle Valley Granite (Pty) Ltd (4-5).
The court found that the applicant had an instant remedy available, namely to comply with its obligations as a warehouse licensee under the Customs and Excise Act by increasing its security bond. It held that SARS' requirement of compliance, including the increase of security, was triggered by strict observance of section 107(2) of the Customs Act, and that the applicant had an available remedy under section 60(1)(c) of the Customs Act by way of an application for alteration or amendment of security (10).
The court concluded that the applicant had created its own urgency by failing to provide the Commissioner with the requested information and documents and by failing to submit an application to have the security value increased (11).
Outcome
The application was struck from the roll with costs for lack of urgency. Costs were ordered to include the costs of senior and junior counsel, to be taxed on Scale C in respect of senior counsel and Scale B in respect of junior counsel (1).
Major issues / areas of contention
- Whether the application met the urgency requirements of Rule 6(12)(b) of the Uniform Rules of Court.
- Whether the applicant could obtain substantial redress in due course despite the ongoing detention of consignments.
- Whether the applicant's own conduct, including failure to provide requested documentation and failure to apply for an increase in security, had created the urgency relied upon.
- Whether the applicant had an available statutory remedy under section 60(1)(c) and section 107(2) of the Customs and Excise Act to address the security shortfall.